From Shoe Clothing Industry Development To Analyze Three Secrets Of Business Model Innovation After Consumption Weakness

Despite the 2011, we are psychologically prepared for the economic situation of the coming year.

But in 2012, the market situation was still more severe than expected.

Statistics show that the growth rate of total retail sales of social consumer goods is basically maintained at around 15%, which is significantly lower than that in the same period of 2011, which means that consumption weakness has become a reality.

Textile

Industry, for example, two or three years ago, role, Meng Jie and fuanna, the "home textile three swordsmen" after listing, launched a fierce "enclosure movement."

However, in the first quarter of 2012, apart from the steady performance of fuanna, Luo Lai and Meng Jie have already bid farewell to the era of rapid growth, and their achievements are not comparable with the high growth of the previous two years.

The first quarter report released by Meng Jie home textile showed that its sales revenue was 269 million yuan, down 9.93% compared with the same period last year, and after deducting the 2011 year-end tax rate adjustment factor, its actual profit growth in the first quarter was only 2.3%.

In addition, as of March 22, 2012, the performance of several major sports brands in China: Anta, PEAK, XTEP and PEAK declined.

These data and information indicate that weak consumption has become a huge obstacle in the domestic consumer goods market.

The secret behind consumption weakness

When it comes to weak consumption, it is usually thought that the purchasing power of consumers is insufficient. But from the marketing point of view, the fact that consumption is weak is actually hidden in the following three aspects:

1. consumer demand has changed.

Take the sports footwear industry as an example, the current weakening of consumption is directly related to the change of consumption demand, which is due to the "de movement" trend of Beijing Olympic Games.

In addition, the sports footwear industry has been seriously involved in product homogenization and price war. Under the combined action of these two factors, the phenomenon of consumption weakness is inevitable.

2., the industrial structure has changed.

When the terminal stores rent increases, labor costs rise and consumption is weak, it is very likely to bring about changes in the industrial structure.

Taking garment enterprises as an example, e-commerce has become a potential growth force in the fierce competition of real economy, and it may change the industrial structure of the entire garment industry.

Ai Rui net released data: in 2011, the size of China's apparel online shopping market reached 145 billion 500 million yuan, of which B2C clothing network shopping market scale was 30 billion 600 million yuan, accounting for 21%; and founder securities analysis indicated that in 2011, the clothing network shopping market scale increased 61.1% compared with 2010, and the B2C market share increased year by year, it is expected that the clothing online shopping market in China will continue to maintain high-speed growth in the future.

3. the business model has changed.

When the domestic apparel industry is facing the predicament of weak consumption, the international fast fashion dress brands represented by UNIQLO, H&M, GAP and ZARA have strengthened their expansion in the Chinese market. This sharp contrast promotes the domestic shoe and clothing brand to start from extensive enclosure to lean operation, from cost driven to value driven pformation, and brand to enhance the business mode of product premium.

In the face of weak consumption, I think of Zhang Ruimin's words: "there is no weak market, only weak products; there is no off-season market, only the idea of off-season."

We might as well add that there is no weak consumption, only weak enterprises.

In fact, the weakness of consumption is not terrible. If the strategy is right, it can completely turn danger into danger.

Challenges brought by weak consumption

In the era of low consumption, most enterprises will face the following challenges:

Brand power challenge

When the economy goes up, the brand loyalty of consumers from all walks of life will be higher.

However, in the era of low consumption, the choice of consumers will not be so arbitrary. The top brands can still get more consumers' choices with their brand influence, but consumers will have less willingness to buy than non top brands.

Therefore, when the consumption weakness is coming, it is also the time to test the brand influence. Enterprises who usually do not pay attention to brand building are likely to face great challenges at this time.

Product power challenge

When consumption is weak, it is also the time to test product strength.

Product strength includes product quality, taste, packaging and other comprehensive factors.

During the boom period, enterprises with a larger market capacity and less powerful products can also get a share in the market. As long as their price is not high, the coverage of the channels is wide, and they can also satisfy some consumers' needs with low quality requirements.

However, in the era of weak consumption, consumers' purchase intention will be greatly reduced because of insufficient purchasing power of consumers or the price of products being forced to lift prices.

If the product strength of the enterprise is not strong, it will be hard to get the favor of consumers.

Challenge of channel power

During the period of weak consumption, the channel operation of enterprises will also face enormous challenges.

When the economy goes up, the huge investment of enterprises in channel operation can be offset by the growth of sales. However, in the period of weak consumption, a large part of the investment in channel operation is a fixed cost. Once the sales growth is inhibited, it will soon affect the level of enterprise profitability.

At the same time, from a deeper level, this will also require changes in the channel operation mode of enterprises. During the period of weak consumption, enterprises need to carry out more meticulous operation and control of channels, which is a big challenge for enterprises.

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Operational challenges

Although consumption weakness is manifested externally, its impact on enterprises is closely related to the internal operational capability of enterprises.

If the operation capacity of the enterprise is not strong, even if it is not the period of weak consumption, its sales growth will also be affected, and if the business operation ability is very strong, even in the period of weak consumption, it can also grow against the trend.

Taking Lining as an example, it suffered a two digit decline in the first quarter of 2012. Its root lies in the high inventory to be digested and the lack of channels. Compared with Anta, XTEP international, 31st degree and PEAK, the performance is relatively good.

Therefore, strengthening internal operations, reducing operating costs, improving efficiency, stabilizing cash flow and consolidating market bases are all internal strengths that enterprises must cultivate during the period of weak consumption.

The way to break through the weak consumption

The period of weak consumption is often the period of enterprises' pformation.

Industry as an example, some enterprises want to try to pform like H&M, ZARA and other fast fashion clothing enterprises, increase R & D investment, shorten production cycle and speed up product renewal; while others want to enhance brand reputation, increase product R & D efforts, launch new products faster, and others hope to attract more professionals, conduct market research for consumers, and develop products and services targeted.

So how can we overcome the predicament brought by the weakness of consumption? I believe that the innovation of business mode is the opportunity of enterprises. Through the innovation of business models, enterprises can integrate and restructure products, brands, channels and internal operation systems, so as to break through the difficulties and challenges brought by consumption weakness more effectively.

Breakthrough in strategic positioning

In the era of weak consumption, the breakthrough of brand positioning is very important.

As mentioned earlier, the weakness of consumption often indicates that great changes will take place. If we reconsider the orientation of the future at this time, enterprises will have the chance to overturn the existing industrial structure.

The premise of strategic positioning breakthrough is redefining the target group and core value demand.

A garment enterprise initially located in the field of sports casual shoes and clothing, but the market has not performed well in recent two years.

After rethinking the pain, this company redefined the strategic orientation of fashion and Leisure: on the one hand, it adjusted the brand positioning to the public fashion leisure products for its new target consumer groups of the former working-class; on the other hand, aiming at the target consumer groups of white collar, it launched for business fashion and leisure products, and the new brand positioning helped the enterprise to fundamentally get out of the predicament of consumption weakness.

Breakthrough of product system

The breakthrough of the product system is the inevitable result after the breakthrough of strategic positioning, and it is also an effective means to break through the weakness of consumption.

Product is a direct manifestation of consumer demand. All strategies must ultimately communicate through products, services and consumers. Strategic positioning determines the future direction of development of enterprises, but only when they are embodied in specific products can they be recognized by consumers.

In the era of weak consumption, enterprises must upgrade their product structure, which involves the expansion or extension of the product itself. The product expansion is closely related to the width of the product line. By increasing the width of the product line, it can meet more subdivision needs of the consumer group, and the product extension is related to the depth of the product. Deepening the production line can satisfy the different needs of consumers by enriching product specifications, both of which are very effective means in the era of weak consumption.

To achieve these two points, enterprises must establish a systematic commodity R & D system, greatly enhance the R & D capability, so as to fundamentally enhance the competitiveness of products.

Breakthrough of brand system

An important reason for the weakness of consumption is that consumers' nerves have been severely paralyzed by the concept of homogenized products and brands, and they have been hard to arouse consumer enthusiasm.

Therefore, another important way to break through the weakness of consumption is to realize the differentiation through thorough insight into consumption demand, and to explore a bigger Blue Ocean from it.

An effective means is that enterprises can achieve effective "occupation" of different subdivision consumption demands through different sub brands. At present, this multi brand management mode is gradually prevailing in the domestic shoe and clothing industry.

In recent years, Wenzhou shoe enterprises, represented by AOKANG, red dragonfly and Kangnai, are implementing a new retail format known as "brand integration store". They sell their own brands and other agency brands to this brand store to enlarge the brand's influence. The operation mode of BELLE, the shoe giant, has given more inspiration to the domestic shoe and clothing enterprises. BELLE has always had more than a dozen brands of self owned or agent brands and shopping malls to negotiate with each other. There are always disadvantages in almost every mid and high-end shopping mall's shoes area. We can see BELLE's brand stars: BELLE, BELLE, Tata, etc. its brand family is magnificent.

Based on the exemplary role of these leading brands, domestic and small shoe and garment enterprises are also eager to win more opportunities and benefits by taking the road of multi brand management.

Breakthrough in channel operation

In the past ten years, China's footwear industry has launched a vigorous nationwide "enclosure movement". In the wave of "opening more stores, opening large stores and opening up good shops", there are numerous brand shops sprung up on the vast land of China.

However, in the luxuriant cluster of terminal construction, the rising cost and the weak consumption make the terminal construction become a heavy burden of the enterprise from the "trump card" of the enterprise.

Therefore, shoes and clothing enterprises must change the situation of extensive channel operation, strengthen the integrated cooperation of manufacturers, and strengthen the terminal control at the same time. We can start from the following three aspects: first, we must break the "prisoner's dilemma" among manufacturers, and focus on promoting the construction of the agent's operation system. We need agents to set up a more systematic operation system in the organizational system, team configuration and management system, and match with the related organizational system and management system of enterprises, so as to achieve the integrated cooperation between the two sides.

Secondly, enterprises must change the extensive regional market expansion mode in the past, build a focus on intensive farming operation system, carry out systematic, targeted, systematic and planned expansion to the regional market, thereby enhancing the success rate of regional market, building a solid strategic base, laying a solid foundation for the expansion of the brand, and effectively coping with market competition.

Thirdly, enterprises must refine a standardized sale mode of terminal stores, so as to ensure the performance of single store businesses of agents, franchisees and direct stores, so as to achieve rapid expansion of channels. This is the weakest, most difficult and most convenient part of shoes and clothing enterprises.

Market practice has also proved countless times: the more mature the shop selling mode is, the more rapid the channel expansion will be.

Breakthroughs in internal operations

There are three factors that affect the success of an enterprise: strategy, mode and operation.

It is not enough for an enterprise to have the correct strategy and mode. If we do not build an efficient system, the realization of strategy is just empty talk.

Data show that 75% of the failure of enterprises is due to the inability of enterprises to implement the established strategy.

Therefore, the operation system is the prerequisite for enterprises to ensure the realization of the overall strategy, and its purpose is to create a good internal environment for the enterprises, and fully integrate all other resources in the environment so as to enable the enterprise strategy to be implemented.

In the period of weak consumption, enterprises must streamline their organization according to their strategic requirements, make them face the market, pform the operation system from "relying on leadership" to "promoting by process", simplify the links of decision-making, clarify the key business of enterprises, and reorganize the functions of organizations, so as to build an efficient operation system and rapidly improve the executive power of the whole organization.

The key to the tremendous impact of international fashion brands on Chinese enterprises lies in their strong operational capabilities, such as ZARA in Spain.

The procurement of raw materials to production and sales is perfect in every aspect of the entire operation chain, while most local garment enterprises are deeply trapped in the quagmire of "profit changing inventory".

In fact, from the purchase of raw materials to the sale of products, the vast majority of China's garment enterprises are the same as ZARA in terms of industrial chain structure, but it is difficult to match their operational efficiency.

However, from another angle, this gap is also the opportunity and hope for Chinese enterprises in the future.